NZFOX share options declared as futures contracts The Securities Commission has declared that share options listed and traded as NZFOX share options are futures contracts under the Securities Markets Act 1988. These share options will be traded on the Sydney Futures Exchange. "This declaration will give the market certainty about how these new products will be regulated," says General Counsel Liam Mason. NZX applied for the declaration so it could launch NZFOX share options on or around 28 June 2005. Dealers in these share options will have to be designated by the NZX under its Futures and Options Rules, or alternatively seek authorisation from the Securities Commission. This declaration was gazetted in the Futures Contracts (NZFOX Share Options) Notice 2005 on 16 June 2005. The notice is available from Bennetts Government Bookshop or can be viewed at www.legislation.govt.nz		Tranz Rail settlement The Securities Commission has reached a settlement of the insider trading claim brought against former CFO of Tranz Rail, Mark Bloomer. He has agreed to pay the Commission $156,000. This is the maximum sum recoverable by the Commission in terms of compensatory damages and pecuniary penalties, in relation to the share sale that was not carried out under the approved procedure. It also includes a contribution to the Commission's costs. The Commission has received a statutory declaration from Mr Bloomer in which he has disclosed his assets and liabilities. He has agreed to make this payment without any admission of liability. If he is requested to do so by the Commission, he will provide information to the Commission and make himself available as a witness in the litigation. The settlement has been approved by the High Court. No judgment has been entered against Mr Bloomer. Why the Commission's work matters The globalisation of capital markets opens opportunities for both investors and issuers of securities, but also offers increased opportunities for fraud, Chairman Jane Diplock told a meeting of the New Zealand Institute of Management in June 2005. The Commission's work aims to enhance the integrity of the securities markets and to increase investor confidence in those markets. "We use our powers to act against illegal market behaviour and to comment on poor market practices," Jane Diplock said. In order to attract international investors New Zealand needs to be seen to have a world class regulatory system and a market in which all participants are given timely and relevant information. The markets also need to be attractive to domestic investors, and the Commission's education programmes have this objective. "We want educated young people who are able to participate in the securities markets throughout their lives," Jane Diplock said. "We also need to alert people to investment scams and how to avoid them." Financial intermediaries have a key role advising people about investing, and the Commission will undertake a campaign later this year to alert intermediaries to their responsibilities under new law. Internationally the Commission is contributing to better regulation of securities markets worldwide through the International Organisation of Securities Commissions.
	Young people and investment The Commission sponsors the investment modules of Enterprise New Zealand Trust's financial education programmes in schools. "Our objective is to give young people the knowledge and confidence to participate in the securities markets," Jane Diplock said. Enterprise New Zealand Trust's programmes currently earn students "credit equivalents" which, although useful, do not appear on a student's record of learning, or count towards University Entrance. The New Zealand Qualifications Authority has recently decided to develop unit standards for personal finances, known by some as financial literacy. These, together with Enterprise New Zealand Trust's Financial Literacy Programme, will make a continuous stream of financial education available in the education system. When the unit standards are developed, students doing financial education will earn credits on the National Qualifications Framework, which will be shown on their record of learning and count towards University Entrance. This will make financial education studies more attractive to teachers, pupils and their parents. Expressions of interests in the unit standards can be sent to michel.norrish@nzqa.govt.nz

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